Leadership and Entrepreneurship

Navin Kumar
6010091005085
BP: PUTTING PROFITS BEFORE SAFETY?
8(a) I am agree with critics that BP had profits before safety because Senior management
was aware of safety lapses, they still chose to do nothing about tem so as to keep costs
under control according to the media which leaked. Management also earlier told about
the problem and labor also given in writing about this problem but due to lack of proper
communication and focus on cost cutting, The company didnt solve this issue early and
accident happened which resulted in 15 deaths and 170 people being injured although the
company didnt find sufficient evidence that BP might have intentionally jeopardized the
safety of its employees through its cost cutting measures. Another reason which Im
agreeing with critics that Texas accident was not the only safety lapse at BP In march
2006, a huge oil spill was discovered in BPs pipeline at Prudhoe Bay, Alaska, USA and it
found that BP had not been maintaining the pipeline properly thats y many of critics
alleged that BP had put profits before safety and Im totally agree with him.
BP management had allegedly ordered a 25% saving on costs and was frugal in
sanctioning funds for the refinery and for these reasons, alarms and instruments were not
replaced and leaking pipes were often patched up using temporary clamps and valves.
I think with the announcement of Brownes early departure BP developed and
unhealthy corporate culture where cost cutting was given more priority than safety of the
workers. In my opinion BP should form an independent review panel to review its five
refineries in the US.
In my opinion questions raised over BPs corporate culture was right because company
was knowing the leaks in pipeline and other problem related to Texas but the companys
actual investment in alternative resources was very small when compared to its
investment in exploration and refining and its excessive emphasis on cost control that led
to these problems. Many of employees of BPs said that the company mantra was Can
We Cut Costs 10%. There were also a mentality that It cant happen here in middle
management level. I think BPs organizational structure was decentralized broken down
on geographical lines and this culture was good for cost cutting and mergers but it had to
change organizational structure and opt for a structure on functional line.
I think the company culture was a factor that contributed to these safety lapses
because of cost cutting pressure and dont focus on safety measure and also middle
management attitude it cant happen and proper communication within the organization
and also departure of Brownes early departure etc these all created unhealthy corporate
culture which contributed to these safety lapses.

(b) It is true that prime duty of an oil company was to run its core business to a high
standard rather than pretending to stand for something other that petroleum, and I think
BP would be able to well served it would focused on improving its operational
efficiencies. British Petroleum was focusing on some other business rather than focusing
on its oil business and I think the company should return to being an oil company rather
than trying to go Beyond Petroleum.
In my opinion Tony Hayward first focus on resolving safety issues as his top priority to
counter the criticisms rose against BPs process safety, systems and culture even at the
cost of growth. Tony Hayward should also try to change BPs corporate culture. He
should also ensure that BPs production increase. He should continue to maintain BPs
leadership in developing alternative energy resources and also to stand up strongly to
Putin who wanted to nationalize the natural resources of Russia which was BP stronghold
etc.